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At-will employment does not mean terminations have no risk

A general rule of employment in most states is that employees may be discharged at any time for any reason or for no reason. There are exceptions to this rule, however, that can trap unwary employers. Employers understand that one exception to at-will employment is that employees cannot be discharged for unlawful reasons such as their age, race, color, gender, disability, religion or national origin. Most employers and supervisors understand these exceptions and are aware that they must avoid discharging employees, or otherwise adversely affecting their employment, for these reasons. What is less well-known by many front-line supervisors is that when employees complain of discrimination, they are equally protected from retaliation for doing so even when their complaints of discrimination or unlawful treatment are unfounded.

As demonstrated in a recent case, supervisors who feel that they were wrongly accused of discrimination can expose an employer to potential liability. Courts and juries are very suspicious of any adverse actions taken against employees after they complain, even if the action occurs weeks after the complaint was made.

In the recent Ohio case of Spengler v. Worthington Cylinders, an employer hired a 53-year-old seasonal employee in a manufacturing setting. The employee received three employment evaluations over six months. The first two evaluations rated him as “definitely above average” and the last one stated that he was “doing an average job.” Despite his decline in performance, he was recommended for consideration as a full-time employee for one of six vacancies. For a variety of legitimate reasons, management did not offer him a fulltime position. Knowing that the employee was interested in obtaining a full-time position, a manager offered to recommend him for full-time work in a different division. According to the employee, the manager making the offer told him the other position was “less strenuous” and that he “probably ha[d] trouble keeping up with the younger guys” in the area where he worked as a seasonal employee.

The employee, who continued to work in a seasonal position, was upset by the manager’s comments and went to the plant manager to inquire if the employer had decided not to hire him full-time because of his age. The plant manager assured him that the company did not reject him because of his age and took allegations of age discrimination “very seriously.” The plant manager also stated that he would never tolerate age discrimination. As part of his investigation following this complaint, the plant manager questioned the manager who had allegedly made the comments to the employee. The investigation concluded that no discrimination had occurred and no disciplinary action was taken.

About a month after the employee had complained to the plant manager, the manager discharged the employee because, according to the employee, the manager told him that his co-workers had made negative comments about his attitude and interpersonal skills. When the employee asked the manager if his previous offer to transfer him to another division was still good, the manager said he would no longer recommend him. According to the employee, no one had previously mentioned his alleged poor attitude or poor interpersonal skills and no one had offered him the opportunity to work on improving this alleged problem before firing him.

The employee sued under the Age Discrimination in Employment Act and state law for both age discrimination and retaliation. Reflecting the original conclusion that no discrimination had occurred, the employer was awarded summary judgment (judgment without a trial) on the discrimination claim. The court for the Southern District of Ohio denied summary judgment on the retaliation claim for reasons that are instructive for employers.

In order to prevail on a retaliation claim, a plaintiff must prove that the adverse action was taken, or caused by, his complaint of discrimination (or other protected activity). In seeking summary judgment on the retaliation claim, the employer had argued that the employee could not prove his complaint caused his discharge because it had occurred one month after his complaint of discrimination. Therefore, the employer argued, the employee’s termination of employment occurred too long after his complaint to prove that one caused the other. The court rejected this argument and found many reasons why a jury could conclude that the manager had retaliated against the employee, including: (i) the employee testified that the manager’s “demeanor” toward him changed after he complained; (ii) the manager reneged on his promise to recommend the employee to another division; (iii) the fact that the manager never spoke to the employee about any alleged shortcomings before firing him; (iv) the employer normally followed a progressive discipline policy (and did not in this case); (v) terminations for a first offense were usually reserved for more serious misconduct, such as dishonesty, stealing and fighting; and (vi) the manager had been ready to recommend the employee for full-time employment before he complained, but after he complained, he decided that he had to be fired without notice or the opportunity to improve his performance.

This case provides yet another example that employers can be exposed to significant liability for retaliation claims even when the allegedly unlawful conduct generating the complaint is legal. Whenever an employee who previously complained about discrimination (or any other protected activity) is being recommended for termination (or any adverse employment action), an employer must investigate and take action carefully. The prudent employer will, before acting, evaluate all of the facts, review related performance documents and otherwise determine the current reasons for termination and compare them with whether such action is generally considered terminable (or appropriate) conduct. In addition, a prudent employer will include regular supervisor training on retaliation, in addition to training on discrimination, harassment and other areas of potential liability arising from employment-related actions.

  • Partner

    Phil is a partner and former co-chair of the Labor and Employment Department. He represents employers in defending against employment-related claims in both federal and state courts. He represents clients involving covenants not ...

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